41. Acquisitions
(a) Acquisitions in the year
The Group made six acquisitions during the year ended 31 March 2022, including Gabi Personal Insurance Agency, Inc. (Gabi) in the USA on 21 October 2021 for US$322m. This wholly owned digital insurance agency allows us to expand our presence in the auto and home insurance vertical. We also acquired the trade and assets of Tax Credit Co., LLC (TCC) in the USA on 13 April 2021, for a cash consideration of US$252m and contingent consideration of up to US$110m, determined by revenue and profit performance. This acquisition augments our expansion into income and employment verification services and the release of our new suite of real-time products, Experian Verify.
In total provisional goodwill of US$469m was recognised based on the fair value of the net assets acquired of US$305m.
| Gabi US$m | TCC US$m | Other US$m | Total US$m | |
| Intangible assets: | ||||
| Customer and other relationships | 87 | 75 | 45 | 207 |
| Software development | 53 | 31 | 21 | 105 |
| Marketing-related acquisition intangibles | 1 | 1 | 7 | 9 |
| Other non-acquisition intangibles | — | — | (6) | (6) |
| Intangible assets | 141 | 107 | 67 | 315 |
| Property, plant and equipment | — | 1 | 3 | 4 |
| Trade and other receivables | 1 | 6 | 36 | 43 |
| Cash and cash equivalents (note 40(d)) | 6 | 2 | 9 | 17 |
| Trade and other payables | (5) | (6) | (39) | (50) |
| Borrowings | — | (1) | (1) | (2) |
| Deferred tax liabilities | (31) | — | 9 | (22) |
| Total identifiable net assets | 112 | 109 | 84 | 305 |
| Goodwill | 214 | 165 | 90 | 469 |
| Total | 326 | 274 | 174 | 774 |
| Satisfied by: | ||||
| Cash and cash equivalents (note 40(d)) | 322 | 252 | 132 | 706 |
| Put options | — | — | 11 | 11 |
| Deferred consideration | — | — | 11 | 11 |
| Contingent consideration | 4 | 22 | 20 | 46 |
| Total | 326 | 274 | 174 | 774 |
These provisional fair values are determined by using established estimation techniques such as discounted cash flow and option valuation models; the most significant assumption being the retention rates for customers. Provisional fair values contain amounts which will be finalised no later than one year after the date of acquisition. Provisional amounts, predominantly for intangible assets and associated tax balances, have been included at 31 March 2022, as a consequence of the timing and complexity of the acquisitions. Goodwill represents the synergies, assembled workforces and future growth potential of the acquired businesses. The goodwill in relation to TCC and one other acquisition is currently deductible for tax purposes.
Other also includes adjustments to goodwill of US$10m in respect of prior year acquisition provisional amounts, principally for a reduction of US$15m to the deferred tax liability for BrScan Processamento de Dados e Tecnologia Ltda, and a reduction of US$6m to the other non-acquisition intangibles of Tapad, Inc, both acquired in FY21.
There have been no other material gains, losses, corrections or other adjustments recognised in the year ended 31 March 2022 that relate to acquisitions in the current or earlier years.
(b) Additional information
(i) Current year acquisitions
| Gabi US$m | TCC US$m | Other US$m | Total US$m | |
| Increase/(decrease) in book value of net assets from provisional fair value adjustments: | ||||
| Intangible assets | 141 | 103 | 73 | 317 |
| Trade and other payables | (1) | (2) | (4) | (7) |
| Deferred tax liabilities | (31) | — | 9 | (22) |
| Increase in book value of net assets from provisional fair value adjustments | 109 | 101 | 78 | 288 |
| Gross contractual amounts receivable in respect of trade and other receivables | 1 | 6 | 34 | 41 |
| Pro-forma revenue from 1 April 2021 to date of acquisition | 6 | — | 12 | 18 |
| Revenue from date of acquisition to 31 March 2022 | 5 | 59 | 29 | 93 |
| Profit/(loss) before tax from date of acquisition to 31 March 2022 | (2) | 15 | 4 | 17 |
At the dates of acquisition, the gross contractual amounts receivable in respect of trade and other receivables of US$41m were expected to be collected in full.
If the transactions had occurred on the first day of the financial year, the estimated additional contribution to profit before tax would have been US$3m.
(ii) Prior years’ acquisitions
Deferred consideration of US$4m was settled in the year in respect of Corporate Cost Control, Inc., and a further US$8m was settled in respect of the acquisition of Axesor businesses. Both acquisitions completed in FY21. In addition, US$31m was settled in respect of the FY20 acquisition of Look Who’s Charging Pty Ltd. In the year ended 31 March 2021 US$5m was settled in respect of acquisitions made in earlier years, principally in relation to the FY18 acquisitions of Clarity Services, Inc. and Runpath Group Limited.
The Group made seven acquisitions in the year ended 31 March 2021 which included the acquisition of a 60% stake in the Risk Management division of Arvato Financial Solutions (AFS) and the whole of the issued share capital of Tapad, Inc. and BrScan Processamento de Dados e Tecnologia Ltda. A cash outflow of US$521m was reported in the Group cash flow statement for that year, after deduction of US$47m in respect of net cash acquired.
(iii) Post balance sheet acquisitions
On 1 April 2022 the Group completed the acquisition of the entire share capital of BillFixers, LLC, a provider of consumer bill negotiation services in the USA for US$5m, on 4 April 2022 we completed the acquisition of the entire share capital of CIC Plus, Inc. and its affiliate Tayvah, LLC, providers of Affordable Care Act compliance and related employer services, for a purchase consideration of US$187m, and on 5 May 2022 we completed the acquisition of the trade and assets comprising Salary Finance Limited’s Work Report and National Employer Database in the UK for US$29m with contingent consideration of US$14m payable on achievement of a number of integration and data coverage objectives.
On 15 May 2022 we agreed to acquire a majority stake in MOVA Sociedade de Empréstimo entre Pessoas S.A. (MOVA), a leading FinTech in Brazil that provides credit capabilities and technology solutions to lenders in the SME market, for R$40m (c. US$8m), and contingent consideration based on MOVA’s calendar year 2024 net revenues, the fair value of which is yet to be determined. We expect the transaction to complete in FY23, subject to regulatory approval.
We have also signed an agreement to acquire a majority stake in APC Buró in Panama, with completion expected in FY23.
The fair values of goodwill, software development, customer relationships and other assets and liabilities in respect of these acquisitions will be reported in the Experian Annual Report 2023, following completion of the initial accounting.